Landmark Maxwell House plant to shut down

June 27, 1990
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HOBOKEN, N.J. -- The Maxwell House Coffee plant, the largest in the world and a landmark on the Hudson River since 1939, is to shut down by early 1992, company executives announced Wednesday.

The Kraft General Foods division of Philip Morris Inc., which owns Maxwell House, decided to keep its plant open in Jacksonville, Fla. The company said last year that one of the two plants would be shut down because of declining coffee consumption.

'We are keeping the Jacksonville plant because our total costs are less there than in Hoboken, and our assessment is that they will continue to be less in the future,' said Raymond G. Viault, president of the Maxwell House Coffee Co. 'Lower labor costs are one factor. Another is that Jacksonville is closer to important supply points.'

Local officials estimate that 3,500 jobs in the New York metropolitan area depend directly or indirectly on the Maxwell House plant, including 600 people working there and others employed by suppliers and shippers.

'It's a tragedy for Hoboken,' said city Business Administrator Edwin Chius. 'They've been an integral part of the community for the past 50 years. It's going to be a trauma for the hundreds of employees there.'

A consulting firm has been hired to counsel employees during the phase-out, Viault said. He said workers would be offered jobs where possible with Maxwell House, Kraft General Foods or Philip Morris.

The Maxwell House plant, with its giant sign showing a cup of coffee 'good to the last drop,' dates back to the days when the Hudson River was lined with piers, factories and shipyards. Once it closes, the Union Drydock Co. next door will be the last vestige of the area where 'On the Waterfront' was filmed.

The company's decision to shut one plant pitted Hoboken and Jacksonville against each other. Both cities offered tax concessions and other inducements to General Foods while union members at both plants at first rejected contract concessions and then reversed themselves.

Hourly labor costs average $2.70 an hour less in Jacksonville. But Viault said the plant also is closer to Maxwell House's Houston plant, which supplies decaffeinated coffee beans, a lithography plant in Tarrant, Ala., which supplies cans and the company's sources of supply in Central America.

Hoboken, working with the Port Authority of New York and New Jersey and Stevens Institute of Technology, had put together a package for Maxwell House that included new technology to be supplied with help from Stevens and a proposal to ship supplies by barge to Hoboken, cutting transportation costs.

Maxwell House's Houston plant, which makes decaffeinated coffee, and another in San Leandro, Calif., which makes specialty coffees, were not involved in the competition. Although overall coffee consumption has declined 24 percent in the United States since 1963, decaffeinated and specialty coffees have held their own, the company said.

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